www.reuters.com/article/idUSN0713300920100208
Benmosche sees P&C unit, US life at AIG's core
Mon Feb 8, 2010 3:00am EST
CEO tells employees AIG stabilized faster than expected
NEW YORK, Feb 8 (Reuters) - American International Group Inc (AIG.N) Chief Executive Robert Benmosche envisions a smaller company in the future, with global property-casualty and U.S. life and annuity operations at its core, according to his comments in an internal company publication.
AIG, once the world's largest insurer, has to shrink because it must sell businesses to pay back the U.S. government as well as to become a more focused organization that is "not too big to fail," Benmosche said in a recent interview with Contact, a copy of which was obtained by Reuters.
"As we think about AIG for the future, the most important thing is that we are a company that pays back our obligations," Benmosche told the magazine. "And that we have survived the crisis. And that we are on our way to regaining our stature as the largest and most successful property-casualty operation in the world, with strong U.S. life and annuity companies, and several other businesses that enhance the nucleus."
AIG declined to comment.
After its near-collapse and bailout in September 2008, AIG set about trying to sell assets to repay the government, whose aid commitment eventually ballooned to $182.3 billion.
But Benmosche, who took over the insurer's reins in August last year, changed AIG's approach to repaying taxpayers. He has slowed divestments and taken some assets off the block, including an offering of property-casualty unit Chartis, moving AIG away from a wind-down mode to looking at preserving and even growing its core franchises.
He has also been bringing new people on board to strengthen the company's management and replace those who have left. AIG is expected to announce on Monday the hiring of Peter Hancock, a KeyCorp (KEY.N) vice chairman and financial services veteran, in a newly created role, overseeing finance, risk and investments.
AIG is still planning a public offering for American International Assurance (AIA) and is in talks with MetLife Inc (MET.N) to sell American Life Insurance Co (Alico).
Benmosche stopped the auction of Japanese units AIG Edison Life Insurance and AIG Star Life as "it was clear that we were not going to get the price for their value." AIG is now seeing how it can streamline their operations and processing, he told the magazine.
Benmosche listed a series of tasks before AIG, which is nearly 80 percent owned by the government, to become a "strong, independent company." These include finding short-term funding for aircraft leasing business International Lease Finance Corp (ILFC), winding down AIG Financial Products portfolios, dealing with loss-making mortgage insurer United Guaranty and getting the right values for AIA and Alico.
AIG is also looking for ways to better deal with the funding needs of American General Finance, which provides consumer finance, as its debts come due, he told Contact.
"When I arrived at AIG, the most important thing was that we stabilize the company and go back to producing good business results," Benmosche told Contact. "I believe we have accomplished that -- faster than I thought."
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